FBI: “Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Insider Trading Charges Against Director of Market Intelligence at Investor Relations Firm”

August 26, 2014

The Federal Bureau of Investigation (FBI) on August 26, 2014 released the following:

“Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that MICHAEL A. LUCARELLI, the Director of Market Intelligence at Lippert/Heilshorn & Associates, Inc. (“LHA”), an investor relations firm, was arrested this morning on 13 counts of insider trading. LUCARELLI is expected to be presented today in Manhattan federal court before United States Magistrate Judge James L. Cott.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, and despite the well-known parade of convicted insider trading perpetrators over the past several years, Michael Lucarelli was not deterred and violated both his company’s policies and his responsibility to its clients by trading on material nonpublic information for his personal financial gain. For the over $500,000 he earned from his illicit trades he is charged with 13 counts of securities fraud.”

FBI Assistant Director-in-Charge George Venizelos said: “Instead of doing his job, Lucarelli spent his days setting up brokerage accounts to make illegal trades using inside information from unwitting clients. He violated the responsibility he had to both company and clients. He also broke the law and today finds himself under arrest and charged in a thirteen count complaint.”

According to the Complaint unsealed in Manhattan federal court:

From at least August 2013 through at least August 2014, LUCARELLI engaged in an insider trading scheme to use and trade upon material non-public information that he acquired during his employment at LHA, an investor relations firm based in Manhattan. Specifically, LUCARELLI, as an LHA employee, had access to working drafts of press releases prepared by LHA for its clients prior to their issuance to the investing public. Those draft press releases contained material, non-public information about business events and announcements relating to LHA’s clients.

In violation of LHA’s policies and in breach of his duties to LHA and its clients, on multiple occasions, LUCARELLI took positions in the stock of LHA clients shortly before the announcement by these companies of material information through press releases prepared by LHA. Shortly following the issuance of the press releases drafted by LHA, LUCARELLI exited the positions in these securities that he had acquired prior to the issuance, thereby profiting on the movement in the stock price.

LUCARELLI repeatedly traded in LHA client securities despite LHA’s written code of conduct, which strictly prohibited LHA employees from trading in any security issued by an LHA client. LUCARELLI carried out his scheme in at least four different brokerage accounts. When opening new brokerage accounts through which to conduct his illegal trades, LUCARELLI did not reveal his affiliation with LHA. And, on two occasions, LUCARELLI opened new brokerage accounts soon after his ability to trade in other accounts had been suspended by the respective brokerage firms.

On or about July 24, 2014, the FBI obtained a search warrant to search LUCARELLI’s office at LHA for evidence of his insider trading activities. During that search, which was conducted without LUCARELLI’s knowledge, the FBI located a locked briefcase which, when opened, contained a draft press release for LHA client, TREX Company (“TREX”). That press release was marked “DRAFT” and contained TREX’s second fiscal quarter 2014 financial results. The following day, after the FBI completed the search, LUCARELLI started purchasing shares of TREX. Between July 25, 2014 and August 1, 2014, LUCARELLI took a net position of 37,400 shares of TREX. Then, on August 4, 2014, shortly before the market opened, TREX issued a press release announcing its second fiscal quarter 2014 financial results. Among other things, TREX announced that sales and earnings before taxes had increased 23 percent and 62 percent, respectively, in comparison with the comparable period in 2013. TREX also issued revenue guidance for the third fiscal quarter of 2014, which was a 27 percent increase over the comparable period in 2013. Within two hours of the announcement, LUCARELLI sold 35,058 of the 37,400 TREX shares he previously purchased. Those sales yielded a profit of almost $90,000.

As a result of the 13 instances of insider trading alleged in the Complaint, LUCARELLI earned at least $538,215.32 in illicit proceeds. Furthermore, the FBI has discovered numerous additional trades that LUCARELLI conducted in LHA client securities and that exhibit a similar pattern of fraud. The FBI’s investigation is ongoing.

* * *

LUCARELLI is charged with 13 counts of securities fraud. The securities fraud counts each carry a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Bharara praised the investigative work of the FBI and thanked the SEC, which has filed civil charges in a separate action.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit http://www.stopfraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais and Damian Williams are in charge of the prosecution. Assistant U.S. Attorney Carolina Fornos of the Office’s Money Laundering and Asset Forfeiture Unit is responsible for the forfeiture of assets.

The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“Nearly $1 million from charters went to firms named in FBI probe”

August 18, 2014

Chicago Sun-Times on August 18, 2014 released the following:

By: DAN MIHALOPOULOS

“Contractors facing scrutiny in an ongoing federal investigation of Concept Schools have been paid nearly $1 million over the past three years for work at three Chicago Public Schools-funded campuses run by the Des Plaines-based charter operator, records show.

In June, the FBI raided 19 Concept Schools locations in Illinois, Indiana and Ohio, including the group’s Des Plaines headquarters. Search warrants showed they were seeking records concerning Concept’s use of the federal “E-rate” program and companies hired under that program, which helps pay for high-tech upgrades.

The agents also were looking for records regarding top Concept officials, the Chicago Sun-Times reported last month.

No one has been charged. The FBI has said only that the investigation is a “white-collar criminal matter.”

The CPS-funded work done by the contractors named in the FBI search warrants has ranged from selling Concept computers and uniform polo shirts to organizing professional-development seminars.

Concept operates three schools in Chicago. All rely almost entirely on public funding.

Concept’s Chicago Math and Science Academy in Rogers Park — one of the schools the FBI raided June 4 — was approved by CPS officials 10 years ago.

The charter operator’s Horizon Science Academy McKinley Park at 2845 W. Pershing Rd. and Horizon Science Academy Belmont at 5035 W. North Ave. have been open for a year after being initially rejected by CPS because of questions regarding student performance at CMSA.

Concept appealed to the Illinois State Charter School Commission, which overrode CPS, ordering them to finance the two schools with tax dollars.

The three Chicago Concept schools have paid more than $283,000 since the start of 2011 to Advanced Solutions in Education of Schaumburg, records show. The company and its founder and former chief executive, Ozgur Balsoy, were named in FBI search warrants served at

Concept’s headquarters and at its schools in Rogers Park and Peoria.

ASE was a consultant for Concept on its applications for federal E-rate funding. The company also was hired to do other work for Concept, including organizing seminars for school administrators and teachers.

Balsoy previously was an administrator at a Concept school in Columbus, Ohio. He formed ASE in Ohio in 2009, expanding to Illinois in 2011. ASE listed him as “sole owner” until 2012. He’s now listed as vice president.

ASE’s president, Erdal Aycicek, formerly served was treasurer of the Niagara Foundation, based in downtown Chicago. Like Concept and many of its contractors, the foundation was founded and continues to be led by Turkish immigrants, many of them with ties to the global Gulenist movement led by Muslim cleric Fethullah Gulen, who now lives in Pennsylvania.

Two other ASE executives — Huseyin Alper Akyurek and Esat Albulut — also previously worked for Concept as administrators at schools in Ohio.

ASE executives did not return calls seeking comment.

Another company listed in the search warrants, Core Group Inc. of Mount Prospect, has been a major contractor for Concept’s schools in Chicago. The three schools have paid more than $550,000 to two Core subsidiaries for goods including computers and polo shirts with school logos on them.

Core’s president, Ertugrul Gurbuz, who was named in the search warrants, also founded Quality Builders of Midwest Inc., a Concept construction contractor whose work included building a gym addition at CMSA at 7212 N. Clark St.

Gurbuz referred questions to attorney Patrick Cotter, who said Friday the company is “in the process of complying” with a grand-jury subpoena it got as part of the FBI probe. Cotter declined to say what Core was asked to turn over.

A Core subsidiary was cited in a 2012 audit, done for Fulton County, Georgia, school officials, that questioned why a Gulen-affiliated charter school in that state bought polo shirts from Core Design & Production when “there were cheaper prices to be obtained.” The principal of the Georgia school told auditors he looked online for a polo shirt vendor and found Core — though the auditors said they found no mention of polo shirts on the company’s website.

Core was started in 2005 by Guclu Koseli, who was a founding board member for Concept in Illinois.

Another contractor named in the FBI search warrants — Signature Maker Inc. of Hoffman Estates — has been paid more than $112,000 by Concept’s Chicago schools, Concept records show.

Signature Maker owner Ergun Koyuncu, who was also named in the search warrants, would not comment.

Concept’s vice president, Salim Ucan, also declined to comment, citing the ongoing FBI investigation.

The federal E-rate program requires competitive bidding in hiring contractors in an effort to ensure taxpayer dollars are spent wisely. There’s no such requirement, though, imposed on charter schools by either CPS or the state charter commission, even though the privately run schools depend almost entirely on tax dollars and CPS requires competitive bidding for its own schools.

Nor do they require charter operators to report to officials who their vendors are or how much they are paid.

None of the deals that Concept’s Chicago schools made with Core or ASE was awarded via competitive bidding.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.



“Federal Judge: Only Powered-Off Cell Phones Deserve Privacy Protections”

May 15, 2013

American Civil Liberties Union (ACLU) on May 15, 2013 released the following:

“By Chris Soghoian, Principal Technologist and Senior Policy Analyst, ACLU Speech, Privacy and Technology Project at 11:27am

A federal magistrate judge in New York recently ruled that cell phone location data deserves no protection under the Fourth Amendment and that accordingly, the government can engage in real-time location surveillance without a search warrant. In an opinion straight from the Twilight Zone, magistrate judge Gary Brown ruled two weeks ago that “cell phone users who fail to turn off their cell phones do not exhibit an expectation of privacy.”

The case in question involved a physician who the DEA believed had issued thousands of prescriptions for pain killers in exchange for cash. In March of this year, the DEA had obtained a warrant for his arrest, and, not knowing where he was, sought an order from magistrate judge Brown forcing the phone company to provide real-time data identifying the location of the physician’s phone.

Although the DEA agents requested a search warrant and the judge found that there was probable cause to believe that the cell phone location data would assist in the location and apprehension of an individual for whom there was already a valid arrest warrant, the judge later published a 30-page opinion further stating that he didn’t think the government needed to seek a search warrant in the first place.

Don’t Want the Government Tracking You? Turn Your Phone Off

In his puzzling opinion, the judge squarely criticizes people naive enough to expect privacy while also leaving their cell phones on when they’re not using them.

    “Given the ubiquity and celebrity of geolocation technologies, an individual has no legitimate expectation of privacy in the prospective location of a cellular telephone where that individual has failed to protect his privacy by taking the simple expedient of powering it off.

    As to control by the user, all of the known tracking technologies may be defeated by merely turning off the phone. Indeed—excluding apathy or inattention—the only reason that users leave cell phones turned on is so that the device can be located to receive calls. Conversely, individuals who do not want to be disturbed by unwanted telephone calls at a particular time or place simply turn their phones off, knowing that they cannot be located.”

The Catch-22 here is that the only people who the judge believes would have any reasonable expectation of privacy are those whose phones are turned off (and thus, not generating any location data that the government could access, even with a warrant). And it ignores the necessity of keeping your cell phone turned on for communicating with family or for work.

That consumers are dumb enough to willingly share their location using the “Girls Around Me” app (which the judge specifically calls out by name, although the wrong one), only further justifies covert, warrantless government surveillance:

    “Given the notoriety surrounding the disclosure of geolocation data to retailers purveying soap powder and blue jeans to mall shoppers, the police searching for David Pogue’s iPhone and, most alarmingly, the creators and users of the Girls Around You app, cell phone users cannot realistically entertain the notion that such information would (or should) be withheld from federal law enforcement agents searching for a fugitive.”

This is, in a word, ridiculous. There is a big difference between location information you knowingly share with a select group of friends (or, in fact, the world) and information collected about you without your knowledge or consent. Someone might be happy to share their location with a few friends by “checking in” using Foursquare while at a music festival, but not want law enforcement to access that same information. And, they would still reasonably expect that their location a week later while at an Alcoholics Anonymous meeting or abortion clinic should remain private. Sharing location data isn’t and shouldn’t be all or nothing.

We are also baffled by the judge’s willingness to tie a reasonable expectation of privacy to the use of a cell phone power button. We’re not sure if the judge has watched the Onion’s spoof news video describing a fictional “Google Opt Out Village” for people who don’t want to be tracked by the advertising company, but the logic in his opinion is consistent with the absurdity of that spoof. If you don’t want Google to track you, stop using all modern technology and move to a remote village. If you don’t want the government to covertly track your phone, turn it off and leave it off. What could be simpler, right?”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“FBI searches ex-Reagan aide Robert McFarlane’s apartment for evidence he lobbied for Sudan”

March 21, 2013

The Washington Post on March 21, 2013 released the following:

“By Associated Press,

WASHINGTON — The FBI has searched the apartment of former Reagan administration national security adviser Robert McFarlane for evidence of whether he lobbied on behalf of the government of Sudan in violation of federal law.

A search warrant on file in U.S. District Court in Washington shows agents seized items this month including handwritten notes about Sudan and White House documents with classification markings up to Top Secret.

It is against the law for Americans to do business with Sudan because of its alleged support for international terrorism and human rights violations, among other things. Sudan’s president, Omar al-Bashir, has been charged by the International Criminal Court with genocide and other crimes during the deadly conflict in Sudan’s western Darfur region.

In an accompanying affidavit, FBI agent Grayden R. Ridd cited a host of emails between McFarlane and Sudanese government officials obtained prior to the search.

“I believe that these emails are evidence that McFarlane was entering into an agreement with the government of Sudan to lobby the U.S. government officials on behalf of Sudan and to provide it advice during negotiations with the United States,” Ridd wrote. He said he believed the emails are also evidence of an attempt by McFarlane and a Sudanese government official “to hide McFarlane’s relationship with Sudan by construing the agreement to make it appear that his contractual relationship was with Qatar, when in fact it was not.”

The affidavit said that the FBI investigation has established that in February 2009, McFarlane entered into a one-year agreement with the government of Sudan to act as its consultant and to lobby the U.S. government on its behalf.

Ridd wrote that the source of the emails to McFarlane appeared to be someone from the Sudanese intelligence service.

The affidavit is listed as “under seal” but is viewable online.

The FBI is also investigating whether McFarlane violated a law that requires anyone working as a foreign agent of another country to disclose that to the Foreign Agent Registration Act Unit of the Justice Department.

The investigation into McFarlane was first reported by The Washington Post.

McFarlane has not been charged with a crime. The case is being handled by the U.S. attorney’s office for the Eastern District of Virginia. A spokesman for the office, Peter Carr, said McFarlane is cooperating with the ongoing investigation and, through his counsel, has asserted his innocence.

McFarlane’s lawyer, Barry Levine, did not immediately return telephone and email messages Thursday. Levine told The Post that McFarlane didn’t violate any laws.

“He has devoted his entire adult life to the interests of this country, and he cares deeply about the people of Darfur,” Levine told the newspaper.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI releases documents that confirm they spy on anarchists

October 22, 2012

RT on October 22, 2012 released the following:

“Two anarchists remain locked up as prosecutors attempt to coerce the testimonies they’ve been subpoenaed to give about acts of vandalism in the Pacific Northwest. In the meantime, though, the FBI has accidentally blown the cover off its own case.

Ever since Leah Plante, Katherine “KteeO” Olejnik and Matt Duran were asked to testify before a federal grand jury earlier this year, all three self-identified anarchists have been adamant about remaining silent. For refusing to speak, federal prosecutors have since put the trio of twenty-something activists behind bars over contempt of court charges, with Plante being awarded her freedom only in recent days. As her colleagues continue their imprisonment, though — where they could remain for the entirety of the 18-month investigation — the FBI has failed to provide to the press or public alike any information as to why they’ve targeted the known activists or what role they could play in unraveling a greater conspiracy.

On Thursday, legal documents intended to be cloaked indefinitely were accidently unsealed in US District Court in Seattle for a moment, finally offering a small bit of insight as to why the FBI has been targeting adherents to a specific ideology and intensifying what some have equated to a politically-motivated witch-hunt aimed at anarchists.

The Seattle Times reports that an affidavit dated October 3 was momentarily made available during last week’s court proceedings, revealing to those in attendance that the investigation into Plante and her peers dates back to earlier this year when the FBI first began spying on a group of suspected anarchists they believed were conspiring to commit acts of violence and destruction.

Beginning as early as April 9, the FBI was conducted surveillance on alleged anarchists from Portland whom soon after planned to travel to Seattle to participate in the city’s May 1, 2012 day of action activities held in coordination with other locales across the country. The feds followed a group of six suspects across state lines from Portland, Oregon into Olympia, Washington in the days before the May Day activities and drafted an indictment that could eventually lead them to charge the group with conspiracy, destruction of government property and interstate travel with intent to riot, according to the 34-page document viewed by the Times. So far, though, none of the six suspects have been formally charged with any crimes.

“Although many anarchists are law abiding, there is a history in the Pacific Northwest of some anarchists participating in property destruction and other criminal activity in support of their philosophy,” the affidavit reads, according to the newspaper.

That’s where the Pacific Northwest Three fit in: investigators had hoped that by subpoenaing Plante, Olejnik and Duran to testify, they’d learn more about anarchists in the region who may have been vocal about any attempts to wreak havoc during the May Day protests.

According to the search warrant unsealed this week, the government claims that tens of thousands of dollars in damages resulted from the May 1 actions in Seattle, largely due to attacks on the William Kenzo Nakamura U.S. Courthouse and a few private businesses in the vicinity. Video footage obtained from the scene has been endlessly analyzed by FBI detectives who have in the weeks and months since tried to build a case to file charges against the suspects, none of whom are reported to include the three persons asked to testify. That investigation has led to filing not just subpoenas against the Pacific Northwest Three, but executing no fewer than five search warrants in July that aimed to recover cell phones, computers, clothing and literature from Plante, her peers and others believed to be in cahoots with any local anarchists.

In addition to being met with silence from the Northwest Three, the trove of “evidence” uncovered by the authorities has so far left them unable to release an indictment targeting their suspects. Instead, they have been left with cell phones that, according to the unsealed affidavit, contain text messages describing the May Day protest as “awesome” but nothing more remotely noteworthy, or at least not enough to file charges.

While Plante has since been freed from prison where she was held in solitary confinement for refusing to comply with the grand jury, both Olejnik and Duran remain behind bars as investigators wait to see if they’ll be willing to speak.

“What (prosecutors) decided to do is choose people and punish them for their association,” Jenn Kaplan, an attorney for Olejnik, tells the Seattle Times. To the paper, a counsel for Olejnik adds that the grand jury investigation specifically sought answers from the anarchist about someone she knows.

Before being imprisoned and released, Plante said that a Freedom of Information Act request she filed revealed that the grand jury was first convened in March, two months before the vandalism she is being questioned about even occurred. Before being held in contempt of court, Plante wrote, “The government wants to use [grand juries] to collect information that it can use in a campaign of repression. I refuse to have any part of it, I will never answer their questions, I will never speak.”

An attorney for Duran adds that while their client isn’t being suspected or accused of the May 1 vandalism in Seattle, the associations that exist within the community are enough to keep him under the FBI’s radar. The intended result, many fear, is a chilling effect on a community of likeminded individuals that could soon enshroud other groups of activists and outspoken youths.

“One of our concerns was they were really targeting him because they perceived him to be associated with the anarchist community,” Gordon says. “It’s kind of a fishing expedition.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI Says Cartel Used Bank of America to Launder Money

July 9, 2012

Bloomberg Business Week on July 9, 2012 released the following:

“By Joe Schneider

The brother of the alleged leader of a Mexican cocaine-trafficking cartel used Bank of America Corp. (BAC) accounts to invest the organization’s drug proceeds in U.S. racehorses, a FBI agent said.

Jose Trevino-Morales, one of 14 people indicted by a federal grand jury in Texas on June 12, used a personal account and a business account under the name of Tremor Enterprises LLC to buy and sell horses using money generated from cocaine trafficking, extortion and bribery, Jason Preece, a special agent with the Federal Bureau of Investigation, said in a June 11 sworn statement filed in federal court in Dallas.

“The ultimate goal of this money laundering operation was to provide Jose Trevino with apparent legitimate assets purchased and maintained by illegally obtained money,” Preece said. Bank of America isn’t accused of any wrongdoing in the agent’s statement.

Details of the transactions were revealed in a probe of the Los Zetas drug cartel, which according to the filing, funnels thousands of kilograms of cocaine into the U.S. each year. Los Zetas is the biggest drug cartel in Mexico, in geographical presence, and controls 11 states in the country, generating millions of dollars of revenue, Preece said in the statement filed in a bid to gain a search warrant for Trevino’s property.

Strong Procedures
“We have strong anti-money-laundering procedures and work closely with the authorities when suspicious activity is discovered,” Larry Di Rita, a spokesman at Charlotte, North Carolina-based Bank of America, said in a phone interview today.

The bank doesn’t comment on any specific legal and customer cases, he said.

Preece filed the statement to support his request for court permission to search Trevino’s property in Balch Springs, Texas, a Dallas suburb, where he said investigators were likely to find horse ownership records, bank statements and cellular phones used to communicate with Los Zetas.

Trevino, who earned $29,000 in 2009 from Texas Stone and Tile LLC, had expenses of $200,000 a month the following year to support his horses, according to an FBI informant who isn’t named in the filing. The drug cartel had bought at least $4.2 million worth of quarter horses, which are used in short- distance races, over a four-year period, according to the indictment.

The two most well-known horses Trevino had were Tempting Dash and Mr. Piloto, according to the filing.

Mr. Piloto won the All American Futurity race in 2010 at Ruidoso Downs Race Track, with Tremor Enterprises’ bank account being credited with $968,440 as a result, Preece said.

Miguel Angel Trevino Morales, 38, leader of the Los Zetas drug cartel, and his brother Oscar Omar Trevino Morales were also indicted by the grand jury.

The defendants are charged in the May 30 indictment with conspiracy to launder monetary instruments. The crime carries a maximum penalty of 20 years in prison.

The criminal case is U.S. v. Morales, A-12-cr-210-SS, U.S. District Court, Western District of Texas (San Antonio). The application and affidavit for search warrant is 3:12-mj-255, U.S. District Court, Northern District of Texas (Dallas.)”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.